Supplier Selection in Project Related Purchasing

Abstract

The object of this study was to define and clarify supplier selection criteria for the project related purchasing of the case company. Besides describing the supplier selection criteria of the case company two other companies were included in the study to get comparable information. The study was implemented as a single case study.

The theoretical framework of the study was three dimensional which were linked together. Firstly, the purchasing activities of organizations were presented. The first part of the theoretical framework constructed the background for this study. This set up introduction of supplier selection which was presented in the end of purchasing chapter along with other processes of purchasing. Supplier selection was presented widely: different models of supplier selection were presented, from which Analytical Hierarchy Process was chosen to empirical part. Finally in the theoretical part, the benchmarking and its usage in purchasing and supplier selection was introduced.

Analytical Hierarchy Process was chosen as research method besides interviewing. AHP model fulfilled the case company’s requirements. However, the presentation of the other supplier selection models was useful for supplier selection criteria defining and for understanding the differences of presented models. The AHP questionnaire was formed to be based on the theoretical literature and the criteria had relevance to the industry where the case company was operating. It was given in to all 16 experts in the case company and two other companies, from which 12 was answered. The results showed that product cost, quality, capacity and logistical cost were the most prioritized criteria in the case company. Interviews in two other companies supported the results but also gave a reason to take into account some other criteria.